Cash free debt free question- LBO
Say a sponsor wants to buy a company on a cash free debt free basis, as is normal but the company has bonds in its structure rather than term loans.
What happens there given bonds don't have much prepayment flexibility. Would the sponsor make whole the bonds? Or would sponsors not even consider those companies with bonds in their structure?
Change of control should trigger redemption
what is coc typically, 101?
precisely, usually CoC happens within 15 days of the event and is 101% of par in addition to accrued interest expense
Just FYI, debt free / cash free refers to the equity value paid not to the capital structure at Closing. You can buy a company “debt free / cash free” and roll the existing debt over (in fact, often you do this for at least some portion of the debt, such as finance leases)
For example, the Target has an EV of 500, of which 200 is net financial debt and 100 is finance leases. Assume you would refinance the net debt, would you only need to raise funds of 400, since the finance leases are assumes/rolled?
Est voluptates aliquam omnis ut. Rerum in earum tempore aspernatur repellendus eius. Et hic iure suscipit corrupti et.
Id voluptates exercitationem ex minima aliquid nisi nihil. Dolore facere reprehenderit pariatur blanditiis accusamus id cum. Autem illum voluptatem voluptas velit hic temporibus aut quam.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...